Brussels, 07/10/2004 (Agence Europe) - At its monthly meeting which, by invitation of the governor of the Belgian national bank, was held in Brussels, the Council of Governors of the ECB decided on Thursday to leave the minimum submission rates applied to principle re-financing operations at 2%. Interest rates for the marginal loan facility and for the deposit facility also remain unchanged, at 3% and 1% respectively. The Council of Governors feels that the rate of growth should continue over the next few quarters, according to its president, Jean-Claude Trichet, with "well-directed" world demand and a "favourable international environment and funding conditions which are highly conducive" to investments in the euro zone.
Jean-Claude Trichet said: "any reference scenario concerning future developments is swathed in uncertainty, which is related to petrol prices in particular at the moment". If these remain high, they could "put the brakes on growth". However, he considers that this risk is a moderate one, compared to earlier periods characterised by greater vulnerability, and he stated that all signs pointed to the annual pace of inflation not going back under 2% in 2004, but in 2005. On the budgetary situations of the countries of the euro zone, he confirmed that "many" of these countries "are on line for a deficit close to or above 3%", and recommended that they step up the cleansing of their public finances to meet the challenge of structural reforms, in line with the Lisbon strategy. On the business of the Greek statistics, Mr Trichet stressed that it was "vital for the credibility of budgetary monitoring that the feasibility (…) of the statistics on public finances and their timely declaration are guaranteed". He said that these procedures could not change depending on who was in power, but must be stable and homogenous in each country. On the expected upturn in employment in the euro zone, Mr Trichet feels that "unemployment could see a rise over the coming year", but then qualified this prediction, acknowledging: "Insofar as we have seen that businesses have probably- more than in the past- reduced the work factor by reducing the number of hours worked rather than staff, we think that first of all, we will see an increase in the number of hours worked".